The Finnish Pension Reform of 2005

Jukka Lassila () and Tarmo Valkonen ()
Additional contact information
Jukka Lassila: ETLA, Lönnrotinkatu 4 B, Helsinki, FI-00120, Finland.
Tarmo Valkonen: ETLA, Lönnrotinkatu 4 B, Helsinki, FI-00120, Finland.

The Geneva Papers on Risk and Insurance - Issues and Practice, 2007, vol. 32, issue 1, pages 75-94

Abstract: A major reform in the Finnish private-sector earnings-related pension system came into effect on 1st January, 2005. It was negotiated in 2001–2002 between the central organisations of employers and trade unions and representatives of the central government. This paper describes the reform and analyses its effects on selected macroeconomic variables, on the pension system and on the position of different birth cohorts and different educational groups. The reform appears to be successful in many respects. It simplifies the private-sector pension system and makes it a model that other pension systems in Finland will converge to. The reform rewards postponing retirement. It curbs the increase in contribution rate without endangering the adequacy of replacement rates. The increase in labour supply will have beneficial welfare effects. The new system also responds rather well to uncertain future demographics. Despite this apparent success of the reform there remains a serious doubt of its adequacy, as contribution rates are still expected to rise by several percentage points. The Geneva Papers (2007) 32, 75–94. doi:10.1057/palgrave.gpp.2510108

Downloads: (external link)
http://www.palgrave-journals.com/gpp/journal/v32/n1/pdf/2510108a.pdf Link to full text PDF (application/pdf)
http://www.palgrave-journals.com/gpp/journal/v32/n1/full/2510108a.html Link to full text HTML (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Ordering information: This journal article can be ordered from
Palgrave Macmillan Journals, Subscription Department, Houndmills, Basingstoke, Hampshire RG21 6XS, UK
http://www.palgrave- ... subscribe/index.html

Access Statistics for this article

More articles in The Geneva Papers on Risk and Insurance - Issues and Practice from Palgrave Macmillan Journals
Series data maintained by Elizabeth Gale ().